Sunday, February 21, 2016
A May 16 2014 Georgia Straight profile on real estate marketeer Bob Rennie states that "there are more than 284, 000 households in the [Greater Vancouver] region with people between 55 to 74 years old." (The source is the Urban Futures Institute.) Of that group, 128, 000 have clear-title. The combined value of these titles is 113.4 billion dollars.
That's a lot of money.
Here's another princely sum: in the past fiscal year, the BC provincial government received 1.15 billion dollars in property transfer tax, with 25% of that coming from taxes collected by the City of Vancouver. (The source here is the Vancouver Sun, by way of a freedom of information request.) Between April 1, 2014-March 31, 2015 there were 16, 635 transactions in Vancouver proper. The fiscal year that ends next month is rumoured to be 20% higher than last year.
What to make of these numbers?
On the topic of the Vancouver housing market, macroeconomic researcher David Madani had this to say:
Prices in that market...have been completely detached from incomes for a number of years.
On speculation and "shadow flipping", Madani and his colleagues at Capital Economics are not surprised:
We think it's all just a credit-driven asset bubble…part of it due to foreign investors…a reflection of easy credit [and] low interest rates…not driven by market fundamentals…an irrational market.
On property price-to-income ratios:
It's over 12 now…affordability is a major problem.
On the role of foreign investors:
No one knows how strong it is because there is no data on it…yes, it's happening, but…it's not the main driver…it's happening all over.
(Note what Rennie said in his Georgia Straight profile: "I believe we have to start admitting that we no longer live in Vancouver, we live on the planet.")
On the role of government as both a property transfer tax collector and an ostensible advocate for affordable home buying options, the question was not asked. However, questions pertinent to government's role (tax breaks for home buyers and builders; an increase in higher-end property transfer taxation; and demographic data collection on property buyers/investors) are addressed in the most recent provincial budget.
(photo: West End from Burrard Bridge  by Fred Herzog)